4 hidden costs of retirement

Editor's note: This article originally ran on MoneyRates.com. It has been reprinted here with permission.

Some may think they've stashed away enough money for retirement, but planning for the costs of post-work years is no simple task. Many workers find themselves confronting hidden costs after they leave the workforce.

The worst part? Those hidden costs have a habit of rising over the years.

Elle Kaplan, founding partner and chief executive officer of LexION Capital Management in New York City, says that pre-retirees have a bad habit of underestimating how much they'll spend once they leave the workforce.

"Remember, you will have a lot more free time," Kaplan says. "You have all day to sit and watch QVC and the Home Shopping Network. You have more time to go out to dinner. You might spend more than you think."

Still, it's possible to keep your expenses under control by learning about these hidden costs in advance and planning for them. Here are some common expenses that often get overlooked during the retirement-planning process.

1. Health care

It might seem odd to consider medical costs as a hidden cost of retirement. As you age, you're likely to become acutely aware of how much it costs to keep your health. Besides, there is always Medicare to help cover those medical expenses, right?

The problem is that health care tends to cost more and require more out-of-pocket expenses than pre-retirees expect, which can hurt even those who have set aside money specifically for medical costs, says Dan White, financial adviser with Dan White and Associates in Glen Mills, Pa.

White points to the costs of prescription drugs as an example. Retirees are living longer, and with that comes a greater amount of prescription medications for many.

"Health care costs can be huge," White says. "With people living longer, couples can pay a quarter-million dollars in medical costs alone during their retirements."

Fidelity Investments backs this estimate up. The company released a study in 2012 that indicated that the average 65-year-old couple retiring that year would need to have saved $240,000 to pay for their out-of-pocket health care costs not covered by Medicare during their retirement.

2. Housing

Housing costs wouldn't seem to be a big financial drain for those retirees who have paid off their rmortgage loans. But there are always property taxes, and they rarely go down.

Pre-retirees also need to consider the cost of maintaining a home. Fixing leaking roofs and failing furnaces is rarely cheap. Some real estate websites suggest that homeowners should budget 1 to 4 percent of their home's value each year to maintain their residences, which amounts to $3,000 to $12,000 for a $300,000 home.

Those retirees who sell their homes and move into communities designed for residents 55 and older may need to factor in the costs of Homeowners Association dues and, again, the prospect of higher property taxes.

"You can expect those to go up every year," White says.

3. Relocation

Many retirees dream of moving to a warmer climate. Others want to move to be closer to their adult children and their grandchildren. Moving isn't cheap though. Retirees might have to pay for movers. They might have to spend money on new furniture and home decor. They might be moving to a community where everything from haircuts to dinners out to gas for their cars costs more. This all adds up, White says.

And some retirees might relocate more than once during their retirement years. Some follow their grandchildren through several moves, White says.

"I see many retirees who move more often than younger people," White says. "For younger families, they usually move to an area with a good school district and try to stay there for a while. With retirees, they often move several times to be closer to their grandchildren and family members, and relocating costs money each time you do it. You have to plan for that."

4. Grandchildren

Sure, they're easy to spoil, but doing so can be costly. As Kaplan says, many retirees spend more on their grandchildren than they expect. This includes setting aside money to help their grandchildren cover the costs of college tuition. This can be an especially high hidden cost, depending on how many grandchildren retirees have, Kaplan says.

"You don't want to give one grandchild money for college and then not have any left when the other grandchildren come along," Kaplan says. "That can cause a lot of bad feelings."

The best way to prepare for these hidden costs? As usual, it's all about planning long before your retirement years arrive, says Ray White, senior vice president of PNC Wealth Management in Orlando, Fla.

"You don't have to spend hours planning for retirement," White says. "The key is to get started and review where you stand at least annually."

Pre-retirees who do this may reduce their odds of being blindsided by unexpected costs in their golden years.